GAIL Faces LNG Supply Disruption Due to Force Majeure Notice

Significant LNG Supply Challenges for GAIL

New Delhi, March 5: GAIL (India) Limited announced on Thursday that its allocation of liquefied natural gas (LNG) from Petronet LNG Limited has been completely halted following a force majeure notice issued by the supplier. This notice was prompted by disruptions related to maritime navigation in the Strait of Hormuz and potential shutdowns at facilities in Ras Laffan.

In a regulatory update, GAIL stated that Petronet LNG issued the force majeure notice on March 3, citing difficulties encountered by certain LNG vessels during their transit between India and Qatar.

This situation has emerged amid ongoing maritime navigation restrictions in the Strait of Hormuz, coupled with reports of a shutdown at the liquefaction facility in Ras Laffan.

GAIL's exchange filing noted, “One of our long-term suppliers, Petronet LNG Limited (PLL), has issued a Force Majeure (FM) notice on March 3 under its Gas Sale and Purchase Agreement.”

“The notice was prompted by constraints faced by certain LNG vessels due to maritime navigation restrictions in the Strait of Hormuz during their transit between India and Qatar, as well as the reported shutdown of the liquefaction facility at Ras Laffan,” it further explained.

This development follows a communication from QatarEnergy, the upstream LNG supplier to Petronet LNG, regarding a potential force majeure event due to recent regional hostilities.

As a result of the notice, GAIL's LNG allocation under the contract has been reduced to zero starting March 4, the company confirmed.

GAIL is currently evaluating the situation to determine if any supply reductions will be necessary for its downstream customers.

However, the company reassured that LNG supplies from alternative sources and suppliers remain unaffected at this time.

GAIL also mentioned that the potential impact of the ongoing force majeure situation cannot be quantified at this moment.

“The company is actively monitoring the situation and will keep the stock exchanges updated on any significant developments,” GAIL stated.